[Today's Guide]
○IPO system expects reform again to smooth capital fluctuation
○LandOcean Energy Services to develop high-end manufacturing
○New Value Investment bought shares of Kanhoo Industry and Dadonghai Tourism Centre, Wang Wenxue to become new actual controller of Blackcow Food Company
○Medical informatization to see great development, haze frequently occurred in various areas
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[SSN Focus]
○IPO system expects reform again to smooth capital fluctuation
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The spokesperson of the China Securities Regulatory Commission (CSRC) indicated on Nov. 6 after trading hours that the IPOs will be reinitiated recently. For the 28 companies being nodded for IPOs earlier before the IPOs suspension, 10 of them will launch the IPO two weeks later and the rest 18 will launch IPO in two batches before year end. The CSRC will properly arrange approval progress. The CSRC also has proposed policies and measures to reform and improve the IPO mechanism in five aspects. It will cancel the current advance payment for IPOs subscription. Investors only need to pay for the required amount of capital after they succeed in subscribing the IPOs.
Comment: Previous mechanism usually results in huge amount of frozen capitals when IPOs come and some investors even sell some of their stocks for collecting capitals needed by IPOs subscription. It is measured that the highest amount of capitals being frozen in the first half is 5.69 trillion yuan. If advance payment was cancelled, it would only have to pay 41.4 billion yuan, effectively decreasing capitals fluctuation. In addition, the resumption of IPOs, making it more convenient for the capital withdrawal of venture capital investment projects, will also bring more income to the venture capital investment and securities business. Listed companies including Luxin Venture Capital Group Co., Ltd. (600783.SH), Leaguer Stock Co., Ltd. (000532.SZ), Shanghai Dazhong Public Utilities (Group) Co., Ltd. (600635.SH) and Huaren Pharmaceutical Co., Ltd. (300110.SZ) see large size of venture capital investment business.
[SSN Selection]
○The China Securities Regulatory Commission (CSRC) indicates that securities companies have almost completed the cleaning up of off-market margin financing and the number of cancelled accounts only takes up 12 percent.
○China and Singapore will establish an all-round partnership to promote the China-Singapore strategic interconnection demonstration project.
○The State Council on Nov. 7 distributed opinions proposing to effectively contain infringement and counterfeit in Internet area in around 3 years.
○The Minister of Agriculture attends the 13th China Agriculture Trade Fair (ATF) inaugurated at the weekend and he proposes to strive to advance the modernization of agriculture.
○The employment data of the U.S. in October largely beats market expectation. The U.S. dollar index soars by 1.24 percent in a single day, setting the highest record in over six months.
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[Announcement Interpretation]
○LandOcean Energy Services to acquire equities of NEWJCM and Chuanyou Engineering Surver and Design to develop high-end manufacturing
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LandOcean Energy Services Co., Ltd. (300157.SZ) plans to acquire 95.07 percent equities of Jinzhou NEWJCM Company and 90 percent equities of Sichuan Chuanyou Engineering Surver and Design Co., Ltd. with 761 million yuan and 257 million yuan, respectively, through private placement by issuing shares at 13.54 yuan per share. Meanwhile, it will also raise a supporting fund of 720 million yuan through private placement. NEWJCM is principally engaged in centrifugal compressor, while Chuanyou Engineering Surver and Design is mainly engaged in oil and gas engineering. The transaction will expand the business of LandOcean Energy Services to high-end equipment manufacturing area.
The counterparty promises that the net profit of NEWJCM from 2015 to 2017 will be no less than 70.8 million yuan, 80.0 million yuan and 88.5 million yuan, respectively; the net profit of Chuanyou Engineering Surver and Design from 2015 to 2018 will be no less than 23.65 million yuan, 28.40 million yuan, 32.65 million yuan and 37.55 million yuan, respectively.
○Mason Technologies to explore Internet advertisement through private placement
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Shenzhen Mason Technologies Co., Ltd. (002654.SZ) plans to acquire 100 percent equities of Beijing Dingsheng Yixuan Internet Marketing and Planning Co., Ltd. and Beijing Yiwan Wireless Information Technology Co., Ltd. with 414 million yuan and 324 million yuan, respectively, by issuing 13.35 million shares at 23.59 yuan per share to its counterparties. Both of the two companies to be acquired are engaged in Internet advertisement. In addition, Mason Technologies plans to raise a supporting fund of 445 million yuan through private placement at no less than 35.91 yuan per share.
The counterparty promises that the net profit of Dingsheng Yixuan Internet Marketing and Planning from 2015 to 2018 will be no less than 30.0 million yuan, 39.0 million yuan, 50.7 million yuan and 58.3 million yuan, respectively; the net profit of Yiwan Wireless Information Technology from 2015 to 2017 will be no less than 25.0 million yuan, 32.5 million yuan and 42.25 million yuan, respectively.
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○New Value Investment bought shares of Kanhoo Industry and Dadonghai Tourism Centre
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Jiangmen Kanhoo Industry Co., Ltd. (300340.SZ) and Hainan Dadonghai Tourism Centre (Holdings) Co., Ltd. (000613.SZ) both announced that Guangdong New Value Investment Co., Ltd. bought their shares through secondary market acquisition to the 5.70 percent and 5.02 percent respectively in the same account under New Value Investment. New Value Investment stated that it won't acquire the controlling stake of Kanhoo Industry.
Comment: Luo Weiguang, president of New Value Investment recently announced that the company's buying shares funds and merger funds will adopt the linkage model of the first and secondary markets. The company will help other firms to conduct mergers and acquisitions after participating in them.
○Wang Wenxue to become new actual controller of Blackcow Food Company
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Lin Xiuhao, the actual controller of Blackcow Food Company Limited (002387.SZ) transfers his 50.95 million shares of the company (accounting for 10.85 percent of the total share capital) at 8.29 yuan per share to Tibet Zhihe Assets Management Co., Ltd. After the deal, in addition to 18.97 percent equity indirectly held by the company through voting right trust, Zhihe Assets Management will totally hold 29.82 percent equity in Blackcow Food Company, making it the biggest shareholder with single voting right and Wang Wenxue the new actual controller of the company. It is reported that Wang Wenxue is the actual controller of China Fortune Land Co., Ltd. (600340.SH) and will consolidate high-quality assets through the listed company in the future.
○Originwater Technology fully controls Jiuan Construction Investment Group
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Beijing Originwater Technology Co., Ltd. (00926.HK; 300070.SZ) plans to buy 49.85 percent equity of Beijing Jiuan Construction Investment Group Co., Ltd. at over 1.23 billion yuan. After the deal, the company will fully control the latter.
Jiuan Construction Investment Group is leading in water treatment project construction and operation service. Originwater Technology promises to achieve 173 million yuan, 199 million yuan and 236 million yuan of profits during 2015 and 2017 for the company. ChiNext Board surged significantly during trading suspension of Originwater Technology.
○Hebang Biotechnology to raise RMB3.9 bln for carbon fiber project
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Sichuan Hebang Biotechnology Co., Ltd. (603077.SH) plans to raise 3,931 million yuan by issuing 700 million shares at a price of no less than 5.61 yuan per share, of which 2,431 yuan will be used for the project of 3,000 tons of high-performance PAN carbon fiber and 1.5 billion used for paying debts. Construction period of the fundraising project is 1.5 years and its annual after-tax net profit is predicted to be 463 million yuan when the project reaches the designed capacity. The company's net profit was only 165 million yuan in the first three quarters.
Comment: 80 percent of China's carbon fiber is imported from foreign countries. As the demand of aerospace, automobile, new energy and other fields for lightweight and high strength materials is increasing, carbon fiber will see rapid development.
○Controlling shareholder of Hechi Chemical to transfer its equity
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China National Chemical Corporation (ChemChina), actual controller of Guangxi Hechi Chemical Co., Ltd. (000953.SZ), intends to publicly collect transferees. It plans to transfer by agreement 87 million shares held by controlling shareholder Guangxi Hechi Chemical Industry Group Company, accounting for 29.59 percent of the total share capital of the company. Hechi Chemical Industry Group holds 125 million shares of the company, accounting for 42.34 percent of the total share capital. This equity transfer, if done, may change the company's controlling shareholder and actual controller.
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[Industrial Information]
○China to establish population heath information network, medical informatization to see great development
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Zhang Feng, vice director of Planning Information Department of National Health and Family Planning Commission (NHFPC), recently revealed China's population health information construction will realize information-oriented network system on population health interconnection by 2020 to make three data bases, such as all population information, electronic health record and electronic medical record (EMR), basically cover dynamic update on national population information.
Comments: NHFPC is now studying on formulation of 2016-2020 China Healthy Construction Planning. Institutions expect that medical information-oriented market scale will reach a compound annual growth rate of 24 percent under incentive from policies, capital and industrial demand, which is expected to break through 100 billion yuan by 2020. In terms of listed companies, Neusoft EMR of Neusoft Corporation (600718.SH), which is applied in Shengjing Hospital of China Medical University, has been firstly certificated by NHFPC and highly-appreciated in the industry; Shanghai Tofflon Science and Technology Co., Ltd. (300171.SZ) acquired Shanghai Genuine-Tech Co, Ltd., which is mainly engaged in medical informatization with products, for example, automatic supervision system on pharmaceutical production.
○Haze frequently occurred in various areas, environmental monitoring input likely to increase
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Based on report of the Xinhua News Agency, various areas including Liaoning Province constantly face weather with severe contamination of Grade VI after heat supply of one week. Related figure in Shenyang City reaches PM2.5, exceeding 1000 mcg/m3.
Comments: Along with heat-supply seasons in Northern China, haze weather may occur frequently in the future, and the market is likely to pay more attention to environmental protection sector. For a long run, the social is increasingly keeping an eye on air quality, and will make the government and enterprises enlarge input for environmental monitoring. In terms of listed companies, Beijing SDL Technology Co., Ltd. (002658.SZ) and Hebei Sailhero Environmental Protection High-tech Co., Ltd. (300137.SZ), mainly engaged in businesses related to air monitoring, gained average growth rate of over 30 percent in their performances of the first three quarters.
[Weekly Review]
○Investment principles after "Xuxiang Era"
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Heat of arrest event on Hangzhou Bay Sea-crossing Bridge is weakening, but it has deep and long-term impact. Many investors will ask: how to invest after "Xuxiang Era" (Xuxiang, who is arrested of insider trading and stock price manipulation)?
Investment principle one: do not break the laws. A dull impression under "white coat" deeply surprised the society, especially institutions of various kinds and individual investors walking on the edge of the laws. With shock and introspection, investing behaviors tend to be more cautious and rational. Insider trading and stock price manipulation will undoubtedly be the investment taboo for more institutional and individual investors. Justice has long arms.
Investment principle two: earn the money legally. There are many opportunities for investment, various brokerages gain great achievements in the stock market this week, and opportunities show in local stocks of Fujian Province when Chinese President Xi visited Taiwan leader Ma Ying-jeou. Value investment and event drive are interacted this week after Xuxiang was arrested. Surefooted investments can also earn money steadily in a short time. It fully means that everybody can be a hero trader in the stock market based on sensitive information and market trend.
Winter comes with cold wave, but there is still a hope in the future, if investors hold correct investment principles in this moody market.
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